By Doug Desjardins
Before the start of the recession, organic food sales were posting double-digit gains in sales each year as supermarket chains and retailers like Wal-Mart made natural foods widely available and affordable. But the economy has put a damper on that growth as consumers have shifted to cheaper private label brands to save money.
But the slump hasn’t been that bad and sales of organic foods are expected to rebound this year as the economy recovers. According to David Browne , an analyst with Chicago-based research firm Mintel Group International, organic food sales declined less than 1 percent in 2009. The group’s research shows that 40 percent of organic consumers haven’t changed their buying habits during the recession and that just 3 percent stopped buying organics completely because of the economy.
“This is good news for the organic food and drink market, as this group may begin to buy more once recession-related fears begin to fade,” said Browne. Organic food categories that continued to grow by double digits in 2009 included “shelf-sustainable” food and drinks, which jumped 13.4 percent, and packaged organic foods like salads and fruit, which increased 24 percent from 2007 to 2009.
The fact organic food consumers have less expensive options available at Safeway and Supervalu – the nation’s second and third-largest grocery chains - has also helped. Safeway launched its “O” Organics line in 2005 and Supervalu rolled out its Wild Harvest line in2008. Both are less expensive than name brands and Safeway and Supervalu expanded them in 2009 to meet increased demand. And Wal-Mart now carries a wide variety of organic foods, many of them under the lower-priced Stonyfield Farm label.
Other research firms confirm Mintel’s findings that organic food sales have been surprisingly resilient. According to a consumer survey conducted by Experian Simmons in summer 2009, the percentage of adults who said they look for organic and all natural products while shopping was 13.5 percent, down slightly from 14 percent in spring 2008 before the economy collapsed.
David Sprinkle, research director for research firm Packaged Facts, said the fact that consumer intent to buy organics dipped just one-half of a percent in a recession shows a strong commitment. “Consumers who use sustainable products are less likely to make tradeoffs and cutbacks in product categories that they view as essential to their quality of life,” said Sprinkle. “Overall consumption of sustainable foods should remain strong as most of the core sustainability customers remain steadfast in their shopping.”
Like Browne, Sprinkle expects renewed growth in organic and all-natural products – albeit slower growth – as “American consumers continue in this mode as the economy works its way out of the recession.” But sales are unlikely to grow as they did in the post-recession era. In 2008, sales of organics grew 15.8 percent to $24.6 billion, according to a study from Lieberman Research Group.
Consumers who Buy Organics Remain Loyal in Tough Economy
